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Why the Coalition is right and Labour is wrong

April 6, 2011

Today is the first day of the new tax year. A big day as it marks a momentous shift towards a fairer tax system. This morning I listened to the Shadow Chancellor Ed Balls being interviewed on Radio 4. As much as he tried to avoid the question he couldn’t deny that 80% of the less well off people will be paying slightly less tax and that the majority of tax burdens needed to pay off the national deficit will be shouldered by the 20% better off people. This is real progress and the reason why I am still proud of Liberal Democrats being in government.

But of course Labour have now shifted their argument essentially saying that nobody should have to feel the pain of paying off the national deficit because if we go about it nice and slowly the economy would start growing again and the deficit would reduce naturally as tax income would increase by the number of people who find new employment.

However there is a fundamental flaw in this argument namely that the deficit is getting worse every day, because we’re not even paying all the interest on Britain’s debt.  Even the brightest recovery will not generate enough tax income to stabilise the debt.

Of course it would be great if we could avoid the pain of reducing the budget deficit but during the Radio 4 interview the Shadow chancellor didn’t come forward with any realistic model to demonstrate his point.

He couldn’t refute that rather than avoiding the pain it would merely delay the pain.

If Labour were still in charge, Britain would now be like Greece or Ireland.

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2 comments

  1. Wera it would be like `Greece without the vines`



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